BTIG reaffirms Mylan N.V. (Nasdaq: MYL) with a Buy rating and $55 price target, offering up a look into 2017 for the company.

The firm commented on Monday: Heading into next year, we believe a key generic product opportunity could be Advair (fluticasone/salmeterol for the treatment of asthma/COPD, a $2 billion branded market opportunity in the US). GSK’s (NYSE: GSK) Advair is still one of the largest selling branded inhaler products in the US, with US sales in the first 9 months of 2016 of ~$1.5B. While we believe Hikma also filed an ANDA, and has a May 2017 FDA action date, we think Mylan could be in a position to be the first Co. to enter this market in 2017. We believe Mylan filed its ANDA at the end of 2015, and has an FDA action date of March 28, 2017.

Assuming there are two ANDA¡¦s approved in 2017, and pricing drops by ~50%, we think the first generic Co. to enter could generate significant sales at market formation, with sales in excess of $200M within the first 6 months of launch. We believe MYL shares are attractive, based on its discounted valuation (currently trading at 7.8x our CY16 EPS estimate of $4.73, and 6.6x our CY17 EPS estimate of $5.58.

Based on our back of the envelope calculations, every incremental $100M of generic Advair sales generated in 2017 would translate into ~$0.10 - $0.15 of EPS benefit. Currently, our CY17 EPS estimate includes Mylan generating ~$100M of generic Advair sales in the US.

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